Tom Price, H.H.S. Nominee, Drafted Remake of Health Law

WASHINGTON — In choosing Representative Tom Price of Georgia to be his health secretary, President-elect Donald J. Trump has signaled an undiminished determination to repeal President Obama’s signature domestic achievement, the Affordable Care Act, and replace it with a health law that would be far less comprehensive.

And Mr. Trump is handing Republicans and their base voters what they have clamored for since the Affordable Care Act became law in 2010 — a powerful force to reverse course.

Republicans were pleased.

“I can tell you where we’re going to start: with a process to repeal and replace Obamacare,” Senator Mitch McConnell of Kentucky, the majority leader, said Tuesday.

Mr. Price, an orthopedic surgeon from Atlanta’s affluent northern suburbs, was one of the first lawmakers to draft a full replacement for the Affordable Care Act. His proposal would take health care in a fundamentally different direction, away from mandated coverage and care and toward a free-market approach, with fewer consumer protections and more freedoms for doctors.

“The president-elect has made it very clear: He wants the Congress, when they convene in early January, to take up the task of repealing and replacing Obamacare first,” Vice President-elect Mike Pence said Tuesday on Fox News. He described Mr. Price as “someone who literally, for the last half a dozen years, has been in the forefront of efforts, not only to repeal Obamacare, but put forward common sense, free-market solutions that will lower the cost of health insurance, without growing the size of government.”

Some 20 million uninsured people have gained coverage under the Affordable Care Act, reducing the nation’s uninsured rate to 8.6 percent, the lowest on record, the Obama administration says. The Congressional Budget Office has not estimated the cost of Mr. Price’s legislation or its effects on coverage, but opponents say the human cost would be steep.

The Price bill, the Empowering Patients First Act, would weaken many protections for consumers in the Affordable Care Act. The law, for example, prohibits insurers from denying coverage or charging higher rates because of a person’s pre-existing medical conditions. Under the bill, this type of protection would be available to people who have maintained coverage in the past — for example, people moving to the individual market from an employer’s health plan.

The federal requirement for most Americans to have health insurance or pay a tax penalty would be eliminated, as would the requirement for larger employers to offer coverage. Billions of dollars that 31 states expect to receive for expanding Medicaid eligibility would also disappear.

Instead, Mr. Price would offer tax credits for the purchase of individual and family health insurance policies. The credits would increase as people grow older and are likely to need more medical care. He would use other tax breaks to coax more people into contributing to health savings accounts that could be used to help pay medical expenses. Such accounts are championed by conservatives as a way to slow the growth of health costs.

The bill would make it easier for doctors to defend themselves against medical malpractice lawsuits. Patients would have a heavier burden of proof if doctors could show that they followed “clinical guidelines” for the treatment of medical conditions.

And under the legislation, it would be easier for doctors to enter into private contracts with Medicare beneficiaries. Such contracts allow physicians to opt out of Medicare’s strictures and charge more than the amounts normally allowed.

The bill would eliminate the federal health insurance exchange, through which millions of people have obtained subsidies for the purchase of insurance coverage. States could contract with private entities to set up websites that resemble HealthCare.gov, but only to provide information on insurance plans’ prices and benefits and their networks of doctors and hospitals. The new websites could not directly enroll people in private plans or in Medicaid.

From his days as a Georgia state senator, Mr. Price, now 62, has been a voice for doctors, and if confirmed by the Senate, he could use his post as health secretary to protect fellow physicians in myriad ways. As health secretary, he would have real power, not only through his influence with Congress but also through the regulatory levers of the Centers for Medicare and Medicaid Services, a part of the Department of Health and Human Services.

His bill says that doctors would generally be “exempt from the federal antitrust laws” when they engage in contract negotiations with health insurance plans over the terms of their service. In many cases over the years, the federal government has accused doctors of violating antitrust laws in their dealings with insurers.

The legislation would also offer federal grants to states for “high-risk pools” to subsidize insurance for people who might otherwise have difficulty finding coverage in the open market because of “the existence or history of a medical condition.”

Such pools have not worked so well in the past, and Douglas W. Elmendorf, a former director of the Congressional Budget Office who is now dean of the Kennedy School of Government at Harvard, expressed doubts about their effectiveness.

“High-risk pools sound clever,” Mr. Elmendorf said Tuesday, “but why would isolating the sickest people be expected to reduce the cost of insuring them?”

Mr. Price’s bill would also allow insurers licensed in one state to sell policies to residents of other states, a change that Mr. Trump often advocated in the campaign.

Beyond the possible loss of coverage gains, Mr. Price’s bill would be controversial for other reasons. One particularly contentious provision would limit the amount of tax-free coverage that workers could receive from their employers. The limits would be set at $8,000 for coverage of an individual employee and $20,000 for family coverage, with adjustments for inflation in later years.

Democrats are preparing for a fight. Senator Chuck Schumer of New York, the next minority leader, called Mr. Price “far out of the mainstream of what Americans want when it comes to Medicare, the Affordable Care Act and Planned Parenthood.”

Mr. Trump said Tuesday that he had chosen Seema Verma, a health policy expert in Indiana, to be administrator of the Centers for Medicare and Medicaid Services. Working in state government and then as president of a consulting company, she helped Indiana expand Medicaid eligibility under the Affordable Care Act, with conservative policies that emphasized “personal responsibility.”

Ms. Verma worked closely with Mr. Pence, the Indiana governor, who honored her this year with a Sagamore of the Wabash award, for Hoosiers who have made outstanding contributions to the state. She has won praise from health care providers and state legislators of both parties in Indiana, and has provided technical assistance to Medicaid officials in other states.

Mr. Price, who is chairman of the House Budget Committee and a member of the powerful Ways and Means Committee, has received generous campaign contributions from health care and related industries. In the latest cycle, he received $396,000 from health professionals, $181,900 from people who work for drug and other health-product companies, and more than $157,000 from people in the insurance business, according to the Center for Responsive Politics, an independent group that tracks money in politics.

In his campaign manifesto, Mr. Trump said Congress should give each state a lump sum of federal money — a block grant — for Medicaid, the program for lower-income people. Regardless of whether they can achieve that goal, Mr. Price and Ms. Verma would almost surely make it easier for states to obtain Medicaid waivers, the vehicle for a wide range of state innovations and experiments, which could include new eligibility rules and cost-sharing requirements.